Visual Bug in Nested Folder Tree View

Issue Type: <b>Bug</b> 1. Create nested folders without files in it. 2. Select the parent folder, it will look like <code><ins>src</ins>/nested</code>. 3. Now click "New File", it will become: <pre> (all in grey) src nested | input file name here</pre> 4. Now click "New Folder", it will become: <pre>(all in grey) src/<ins>nested</ins></pre> 5. Now the tree view will always be in grey, unless you create file again. GIF:  VS Code version: Code 1.65.1 (8908a9ca0f221f36507231afb39d2d8d1e182702, 2022-03-08T02:20:11.670Z) OS version: Darwin x64 21.3.0 Restricted Mode: No <details> <summary>System Info</summary> |Item|Value| |---|---| |CPUs|Intel(R) Core(TM) i5-8257U CPU @ 1.40GHz (8 x 1400)| |GPU Status|2d_canvas: enabled<br>gpu_compositing: enabled<br>metal: disabled_off<br>multiple_raster_threads: enabled_on<br>oop_rasterization: enabled<br>opengl: enabled_on<br>rasterization: enabled<br>skia_renderer: disabled_off_ok<br>video_decode: enabled<br>webgl: enabled<br>webgl2: enabled| |Load (avg)|4, 3, 3| |Memory (System)|8.00GB (0.82GB free)| |Process Argv|--crash-reporter-id db11351d-8b0e-4a89-8e62-31fbc5ba6fa2| |Screen Reader|no| |VM|0%| </details><details><summary>Extensions (30)</summary> Extension|Author (truncated)|Version ---|---|--- icons-carbon|ant|0.2.4 intellij-theme|arz|1.10.0 markdown-mermaid|bie|1.13.2 vscode-eslint|dba|2.2.2 vscode-new-file|dku|4.0.2 gitlens|eam|12.0.2 vscode-html-css|ecm|1.11.0 EditorConfig|Edi|0.16.4 prettier-vscode|esb|9.3.0 copilot|Git|1.7.5250 vscode-pull-request-github|Git|0.38.0 gitkraken-authentication|git|1.0.3 better-cpp-syntax|jef|1.15.13 ts-react-hooks-tools|kin|0.1.17 vscode-gutter-preview|kis|0.30.0 vscode-language-pack-zh-hans|MS-|1.65.2 python|ms-|2022.2.1924087327 vscode-pylance|ms-|2022.3.1 jupyter|ms-|2022.2.1030672458 jupyter-keymap|ms-|1.0.0 jupyter-renderers|ms-|1.0.6 vscode-github-issue-not…